Software group Misys rocked by shareholder revolt over pay

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The Independent Online

Misys insists it will stick to its executive pay plan despite an extraordinary shareholder revolt at the software group's recent annual general meeting.

At the AGM, 37 per cent of votes were cast against the remuneration report, whose potential rewards were branded "wholly excessive" by Pirc, the shareholder group. Last year, only 4 per cent of companies had such strong opposition to their remuneration reports. The shareholder revolt at Misys was in stark contrast to last year's result, when just 1.4 per cent of votes were cast against the pay report.

The FTSE 250 company's non-executive directors also got a rough ride over pay. About 9 per cent of votes failed to support the re-election of Sir James Crosby, the chairman and former boss of HBOS, and John Ormerod, the senior independent director, both of whom are on the remuneration committee.

The committee's chairman, John King, and the other members, Philip Rowley and Timothy Tuff, also suffered sizeable lack of support at the AGM on 28 September.

The results of the votes have only emerged now after the company issued a statement to the Stock Exchange stating that "all resolutions put to the meeting were passed by shareholders" – as it did last year. The figures were published on the Misys website.

A Pirc spokesman said: "Very few companies register votes against remuneration policies of this scale. It is a strong message from shareholders that the company needs to respond to."

However, Misys said it was sticking to the pay plan. A spokesperson for the company said: "We consulted widely with shareholders before entering into arrangements described in the remuneration report. The report was approved at the AGM by a clear majority of shareholders.

"The targets in the company's share plans are very stretching and aligned with shareholders' best interests. We will continue to listen to shareholders and are cognisant of their views."

Ahead of the AGM, Pirc opposed the remuneration report saying that John Lawrie, chief executive, and Stephen Wilson, finance director, received excessive rewards last year, earning bonuses of 190 per cent and 147 per cent of their respective salaries.

Pirc said executives' salaries – $1.09m (£700,000) for Mr Lawrie and £216,667 for Mr Wilson – were at the top end for the sector.

Mr Lawrie's new plan could earn him more than 900 per cent of salary. Executive contracts allow for payoffs of more than one year's salary and for accelerated payment of Mr Lawrie's share awards if the company is bought.

Institutional investors are taking a tougher line with companies on pay and governance after they were criticised for being passive owners in the run-up to the financial crisis.

However, a vote of more than a third against a company's pay report is still extremely rare.

The UK Government has proposed some new measures to rein in top executive pay, including making the votes of shareholders binding.